Peace has also been restored within the Territory of Utah, which at the commencement of my Administration was in a state of open rebellion. This was the more dangerous, as the people, animated by a fanatical spirit and intrenched within their distant mountain fastnesses, might have made a long and formidable resistance. Cost what it might, it was necessary to bring them into subjection to the Constitution and the laws. Sound policy, therefore, as well as humanity, required that this object should if possible be accomplished without the effusion of blood. This could only be effected by sending a military force into the Territory sufficiently strong to convince the people that resistance would be hopeless, and at the same time to offer them a pardon for past offenses on condition of immediate submission to the Government. This policy was pursued with eminent success, and the only cause for regret is the heavy expenditure required to march a large detachment of the Army to that remote region and to furnish it subsistence.

Utah is now comparatively peaceful and quiet, and the military force has been withdrawn, except that portion of it necessary to keep the Indians in check and to protect the emigrant trains on their way to our Pacific possessions.

In my first annual message I promised to employ my best exertions in cooperation with Congress to reduce the expenditures of the Government within the limits of a wise and judicious economy. An overflowing Treasury had produced habits of prodigality and extravagance which could only be gradually corrected. The work required both time and patience. I applied myself diligently to this task from the beginning and was aided by the able and energetic efforts of the heads of the different Executive Departments. The result of our labors in this good cause did not appear in the sum total of our expenditures for the first two years, mainly in consequence of the extraordinary expenditure necessarily incurred in the Utah expedition and the very large amount of the contingent expenses of Congress during this period. These greatly exceeded the pay and mileage of the members. For the year ending June 30, 1858, whilst the pay and mileage amounted to $1,490,214, the contingent expenses rose to $2,093,309.79; and for the year ending June 30, 1859, whilst the pay and mileage amounted to $859,093.66, the contingent expenses amounted to $1,431,565.78. I am happy, however, to be able to inform you that during the last fiscal year, ending June 30, 1860, the total expenditures of the Government in all its branches-legislative, executive, and judicial-exclusive of the public debt, were reduced to the sum of $55,402,465.46. This conclusively appears from the books of the Treasury. In the year ending June 30, 1858, the total expenditure, exclusive of the public debt, amounted to $71,901, 129.77, and that for the year ending June 30, 1859, to $66,346,226.13. Whilst the books of the Treasury show an actual expenditure of $59,848,474.72 for the year ending June 30, 1860, including $1,040,667.71 for the contingent expenses of Con

gress, there must be deducted from this amount the sum of $4,296,009. 26, with the interest upon it of $150,000, appropriated by the act of February 15, 1860, for the purpose of supplying the deficiency in the revenues and defraying the expenses of the Post-Office Department for the year ending June 30, 1859." This sum, therefore, justly chargeable to the year 1859, must be deducted from the sum of $59,848,474.72 in order to ascertain the expenditure for the year ending June 30, 1860, which leaves a balance for the expenditures of that year of $55,402,465.46. The interest on the public debt, including Treasury notes, for the same fiscal year, ending June 30, 1860, amounted to $3,177,314.62, which, added to the above sum of $55,402,465.46, makes the aggregate of $58,579,780.08.

It ought in justice to be observed that several of the estimates from the Departments for the year ending June 30, 1860, were reduced by Congress below what was and still is deemed compatible with the public interest. Allowing a liberal margin of $2,500,000 for this reduction and for other causes, it may be safely asserted that the sum of $61,000,000, or, at the most, $62,000,000, is amply sufficient to administer the Government and to pay the interest on the public debt, unless contingent events should hereafter render extraordinary expenditures necessary.

This result has been attained in a considerable degree by the care exercised by the appropriate Departments in entering into public contracts. I have myself never interfered with the award of any such contract, except in a single case, with the Colonization Society, deeming it advisable to cast the whole responsibility in each case on the proper head of the Department, with the general instruction that these contracts should always be given to the lowest and best bidder. It has ever been my opinion that public contracts are not a legitimate source of patronage to be conferred upon personal or political favorites, but that in all such cases a public officer is bound to act for the Government as a prudent individual would act for himself.

It is with great satisfaction I communicate the fact that since the date of my last annual message not a single slave has been imported into the United States in violation of the laws prohibiting the African slave trade. This statement is founded upon a thorough examination and investigation of the subject. Indeed, the spirit which prevailed some time since among a portion of our fellow-citizens in favor of this trade seems to have entirely subsided.

I also congratulate you upon the public sentiment which now exists. against the crime of setting on foot military expeditions within the limits of the United States to proceed from thence and make war upon the people of unoffending States with whom we are at peace. In this respect a happy change has been effected since the commencement of my Administration. It surely ought to be the prayer of every Christian and patriot that such expeditions may never again receive countenance in our country or depart from our shores.

It would be a useless repetition to do more than refer with earnest commendation to my former recommendations in favor of the Pacific railroad; of the grant of power to the President to employ the naval force in the vicinity for the protection of the lives and property of our fellow-citizens passing in transit over the different Central American routes against sudden and lawless outbreaks and depredations, and also to protect American merchant vessels, their crews and cargoes, against violent and unlawful seizure and confiscation in the ports of Mexico and the South American Republics when these may be in a disturbed and revolutionary condition. It is my settled conviction that without such a power we do not afford that protection to those engaged in the commerce of the country which they have a right to demand.

I again recommend to Congress the passage of a law, in pursuance of the provisions of the Constitution, appointing a day certain previous to the 4th March in each year of an odd number for the election of Representatives throughout all the States. A similar power has already been exercised, with general approbation, in the appointment of the same day throughout the Union for holding the election of electors for President and Vice-President of the United States. My attention was earnestly directed to this subject from the fact that the Thirty-fifth Congress terminated on the 3d March, 1859, without making the necessary appropriation for the service of the Post-Office Department. I was then forced to consider the best remedy for this omission, and an immediate call of the present Congress was the natural resort. Upon inquiry, however, 1 ascertained that fifteen out of the thirty-three States composing the Confederacy were without Representatives, and that consequently these fifteen States would be disfranchised by such a call. These fifteen States

will be in the same condition on the 4th March next. Ten of them can not elect Representatives, according to existing State laws, until different periods, extending from the beginning of August next until the months of October and November. In my last message I gave warning that in a time of sudden and alarming danger the salvation of our institutions might depend upon the power of the President immediately to assemble a full Congress to meet the emergency.

It is now quite evident that the financial necessities of the Government will require a modification of the tariff during your present session for the purpose of increasing the revenue. In this aspect, I desire to reiterate the recommendation contained in my last two annual messages in favor of imposing specific instead of ad valorem duties on all imported articles to which these can be properly applied. From long observation and experience I am convinced that specific duties are necessary, both to protect the revenue and to secure to our manufacturing interests that amount of incidental encouragement which unavoidably results from a revenue tariff.

As an abstract proposition it may be admitted that ad valorem duties would in theory be the most just and equal. But if the experience of this and of all other commercial nations has demonstrated that such duties can not be assessed and collected without great frauds upon the revenue, then it is the part of wisdom to resort to specific duties. Indeed, from the very nature of an ad valorem duty this must be the result. Under it the inevitable consequence is that foreign goods will be entered at less than their true value. The Treasury will therefore lose the duty on the difference between their real and fictitious value, and to this extent we are defrauded.

The temptations which ad valorem duties present to a dishonest importer are irresistible. His object is to pass his goods through the custom-house at the very lowest valuation necessary to save them from confiscation. In this he too often succeeds in spite of the vigilance of the revenue officers. Hence the resort to false invoices, one for the purchaser and another for the custom-house, and to other expedients to defraud the Government. The honest importer produces his invoice to the collector, stating the actual price at which he purchased the articles abroad. Not so the dishonest importer and the agent of the foreign manufacturer. And here it may be observed that a very large proportion of the manufactures imported from abroad are consigned for sale to commission merchants, who are mere agents employed by the manufacturers. In such cases no actual sale has been made to fix their value. The foreign manufacturer, if he be dishonest, prepares an invoice of the goods, not at their actual value, but at the very lowest rate necessary to escape detection. In this manner the dishonest importer and the foreign manufacturer enjoy a decided advantage over the honest mer. chant. They are thus enabled to undersell the fair trader and drive him from the market. In fact the operation of this system has already driven from the pursuits of honorable commerce many of that class of regular and conscientious merchants whose character throughout the world is the pride of our country.

The remedy for these evils is to be found in specific duties, so far as this may be practicable. They dispense with any inquiry at the custom-house into the actual cost or value of the article, and it pays the precise amount of duty previously fixed by law. They present no temptations to the appraisers of foreign goods, who receive but small salaries, and might by undervaluation in a few cases render themselves independent.

Besides, specific duties best conform to the requisition in the Constitution that "no preference shall be given by any regulation of commerce or revenue to the ports of one State over those of another." Under our ad valorem system such preferences are to some extent inevitable, and complaints have often been made that the spirit of this provision has

been violated by a lower appraisement of the same articles at one port than at another.

An impression strangely enough prevails to some extent that specific duties are necessarily protective duties. Nothing can be more fallacious. Great Britain glories in free trade, and yet her whole revenue from imports is at the present moment collected under a system of specific duties. It is a striking fact in this connection that in the commercial treaty of January 23, 1860, between France and England one of the articles provides that the ad valorem duties which it imposes shall be converted into specific duties within six months from its date, and these are to be ascertained by making an average of the prices for six months previous to that time. The reverse of the propositions would be nearer to the truth, because a much larger amount of revenue would be collected by merely converting the ad valorem duties of a tariff into equivalent specific duties. To this extent the revenue would be increased, and in

the same proportion the specific duty might be diminished.

Specific duties would secure to the American manufacturer the incidental protection to which he is fairly entitled under a revenue tariff, and to this surely no person would object. The framers of the existing tariff have gone further, and in a liberal spirit have discriminated in favor of large and useful branches of our manufactures, not by raising the rate of duty upon the importation of similar articles from abroad, but, what is the same in effect, by admitting articles free of duty which enter into the composition of their fabrics.

Under the present system it has been often truly remarked that this incidental protection decreases when the manufacturer needs it most and increases when he needs it least, and constitutes a sliding scale which always operates against him. The revenues of the country are subject to similar fluctuations. Instead of approaching a steady standard, as would be the case under a system of specific duties, they sink and rise with the sinking and rising prices of articles in foreign countries. It would not be difficult for Congress to arrange a system of specific duties which would afford additional stability both to our revenue and our manufactures and without injury or injustice to any interest of the country. This might be accomplished by ascertaining the average value of any given article for a series of years at the place of exportation and by simply converting the rate of ad valorem duty upon it which might be deemed necessary for revenue purposes into the form of a specific duty. Such an arrangement could not injure the consumer. If he should pay a greater amount of duty one year, this would be counterbalanced by a lesser amount the next, and in the end the aggregate would be the same.

I desire to call your immediate attention to the present condition of the Treasury, so ably and clearly presented by the Secretary in his report to